Nikola Motor Co. backs out of West Valley truck plant, settles in Coolidge

Arizona Gov. Doug Ducey and other state and business officials joined leaders from Nikola Motor Company on Jan. 30, 2018, as the truck manufacturer announced it will move its operations and headquarters to Buckeye, Arizona, bringing 2,000 jobs. Now, the company is moving to Coolidge, Arizona instead.(Photo: Nikola Motor Company)

Coolidge city leaders on Monday unanimouslyapproved an economic development agreement with Nikola Motor Co. that includes several tax breaks.

The zero-emissions commercial truck company currently located in Salt Lake City is expected to bring about 1,800 jobs to Coolidge and another 300 to Phoenix, where it will move its headquarters and open a research and development center.

Company official: About timing

Nikola pivoted to Coolidge to meet a new production deadline to deliver more than 800 trucks, Coolidge City Manager Rick Miller said.

"Coolidge had a shovel-ready 430-acre piece of property with the infrastructure already in place that will shave years off our construction time," Nikola Motor Co. CEO Trevor Milton said in a statement. "We have customers like Anheuser-Busch and US Express who are ready for their trucks and with this move, we’ll be able to deliver much faster."

The manufacturing facility will be by the Union Pacific Railroad near Interstate 10 and State Route 87 interchange, Miller said.

Construction of Nikola's plant is expected to begin in 2020 and operations are scheduled to begin in 2021, according to the agreement, which expires in 10 years.

The company is expected to spend more than $800 million in construction and equipment of the Coolidge facility, according to the agreement.

Within its first year, the company will hire more than 200 employees and 1,762 employees total by 2025, according to the agreement. The average wages are $80,000.

Big incentives

Under the economic development agreement, Coolidge will reimburse Nikola:

49 percent of the project's municipal construction sales tax.

49 percent of the city's sales tax on any retail sale.

up to $850,000 in permit and review fees.

Without these, Nikola wouldn't have chosen Coolidge, a city document shows.

Coolidge commissioned an economic impact study that found Nikola will generate $278 million in construction wages, and by 2025 the project will have created $1 billion in overall economic output, which measures economic activity, such as receipts of good and services, related to the company's operation.

Deal not possible without Buckeye

Miller, the city manager, said Buckeye was "instrumental" in attracting Nikola to the state.

Nikola's Milton said the move to Coolidge is strictly about the need to set up its manufacturing hub quicker.

"This decision has nothing to do with the City of Buckeye or incentives," Milton said. "Buckeye literally went to the ends of the earth to help us out, but in the end, we just couldn't get a building up fast enough with the land options we were presented."

Although the West Valley city will lose on a large and coveted job hub, Buckeye said it remains positive about the company's plans in Arizona.

“Nikola is an excellent company to work with and we wish them much success in Coolidge,” said Dave Roderique, Buckeye’s economic development director. "Thankfully, the company is remaining in Arizona, and will still have positive impacts on the regional economy.”